Raydan Food Files Capital Cut and Rights Issue With CMA

Riyadh, Saudi Arabia — Raydan Food Company has submitted two application files to the Capital Market Authority (CMA): one to reduce its share capital by 58.5 million SAR, and another to raise 105 million SAR through a rights issue. The company filed both applications on November 5, 2026.

The move follows a long regulatory process. Raydan Food’s board first recommended the dual capital restructuring in May 2025. Shareholders at an Extraordinary General Assembly then approved the capital reduction on November 2, 2025. The CMA filing now marks the next formal step toward execution.

Deal Details

The proposed capital reduction would cut Raydan Food’s share capital from 158,084,670 SAR to 73,136,030 SAR — a reduction of 58,508,824 SAR. Immediately after, Raydan Food plans to raise 105 million SAR by offering rights issue shares to existing shareholders. Both transactions are linked: shareholder approval of the rights issue is conditional on first approving the capital reduction.

Raydan Food submitted both application files simultaneously on November 5, 2026, corresponding to 25-05-1448H on the Hijri calendar. The company will make further announcements as regulatory decisions emerge.

Why It Matters

• The capital reduction signals that Raydan Food is restructuring its balance sheet, likely to absorb accumulated losses before raising fresh equity.
• The 105 million SAR rights issue, if approved, will give existing shareholders the right to maintain their proportional ownership by subscribing to new shares.
• Both steps require CMA approval, relevant official authority clearance, and a fresh Extraordinary General Assembly vote before they take effect.
• The sequence — reduce first, then raise — is a standard recapitalization structure used to clean up a weakened equity base.

What This Means for Investors

• Current shareholders face dilution risk if they do not participate in the rights issue once it opens.
• CMA approval is not guaranteed. The process may take additional months, and either transaction could be modified or rejected.
• The rights issue price, subscription ratio, and timeline have not yet been set — these details will only emerge after CMA approves the prospectus.
• Investors should monitor Raydan Food’s official announcements on the Saudi Exchange for each regulatory milestone before making any decisions.

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THE SAUDI STANDARD’S VIEW: RAYDAN FOOD’S DUAL FILING SIGNALS A DISCIPLINED BALANCE SHEET RESET

Raydan Food’s simultaneous submission of a capital reduction and rights issue application to the CMA represents a textbook recapitalization sequence — one that carries meaningful implications for shareholders, the broader food sector, and the integrity of Saudi Arabia’s equity markets. Investors should approach this development with clear eyes and a disciplined framework.

• A BALANCE SHEET UNDER REPAIR

The decision to slash share capital by more than SAR 58 million before raising fresh equity is a clear signal that accumulated losses have eroded Raydan Food’s equity base to a point requiring structural intervention. This write-down mechanism is designed to restore accounting credibility before new investors are asked to commit capital. The sequence protects incoming shareholders from absorbing legacy losses through their fresh subscription.

• THE RIGHTS ISSUE AS A SHAREHOLDER LOYALTY TEST

The planned SAR 105 million rights offering places existing shareholders at a crossroads: participate and preserve their proportional stake, or stand aside and absorb dilution. For long-term holders, the economic logic of participation depends entirely on confidence in Raydan Food’s post-restructuring operating trajectory. The conditional linkage between the two transactions means neither can proceed without the other, concentrating shareholder decision-making risk at a single assembly vote.

• CMA PROCESS AS A MARKET QUALITY SIGNAL

The extended regulatory timeline — from board recommendation through extraordinary assembly approval to formal CMA filing — reflects the CMA’s structured gatekeeping role in protecting retail investors from premature or inadequately disclosed capital actions. That Raydan Food has navigated each stage methodically is a procedural positive, though CMA scrutiny of the prospectus will be the definitive test of whether this restructuring meets disclosure and suitability standards. Investors should treat final CMA approval as the only credible green light.

• VALUATION UNCERTAINTY DEMANDS PATIENCE

Until the CMA approves a prospectus establishing the rights issue price, subscription ratio, and subscription window, any attempt to calculate the post-restructuring value of Raydan Food shares involves significant uncertainty. Historically, deeply discounted rights issue pricing can reset market expectations sharply upon announcement. Investors who act ahead of these disclosures take on information risk that is entirely avoidable by waiting for official regulatory milestones.

Raydan Food’s recapitalization effort, while company-specific in its circumstances, reflects a broader maturation of the Saudi equity market — one where struggling listed companies are increasingly using CMA-supervised restructuring frameworks rather than opaque workarounds. This discipline aligns with Vision 2030’s ambition to deepen capital market credibility, attract institutional investors, and position the Saudi Exchange as a transparent, well-regulated marketplace capable of supporting a diversified, non-oil economy for decades to come.